Unpaid interns and the FLSA, what you need to know before hiring summer help

Spring is here and summer fast approaching, along with droves of college students hoping to turn their free time into a few months of valuable on-the-job training.

Whether it's because they're simply looking for work experience, or they need to earn a few more college credits, many students are willing to intern for little to no money at all.

While many companies may see at it as the perfect opportunity to get some extra help around the office, there are a few legal issues to consider before agreeing to something for nothing.

Intern or employee?

The Fair Labor Standards Act (FLSA) requires that nonexempt employees receive at least minimum wage for all hours worked and must also receive time-and-a-half pay for all hours worked more than 40 during the workweek.

While the FLSA doesn't define what an intern is, nor provide an exemption from minimum wages or overtime for interns, it does define an employee as "any individual employed by an employer." The definition of "employ" under the FLSA "includes to suffer or permit to work."

Under federal law, for-profit organizations must pay workers unless the position fits six criteria:

1. The training, even though it includes actual operation of the facilities of the employer, is similar to that which would be given in a vocational school;


2. The training is for the benefit of the trainee;


3. The trainees do not displace regular employees, but work under close observation;


4. The employer that provides the training derives no immediate advantage from the activities of the trainees and on occasion the employer’s operations may actually be impeded;


5. The trainees are not necessarily entitled to a job at the completion of the training period; and


6. The employer and the trainee understand that the trainees are not entitled to wages for the time spent in training.

To ensure compliance, employers offering unpaid internships should structure the position in a way that the intern receives the full benefit of the experience.

Employers can take it a step further and establish a written agreement between the business and the intern outlining the terms of the unpaid internship. The document should contain a clear definition of the position, including that it is a learning experience.

If you're not careful, hiring an unpaid intern that later turns out to qualify as an employee could potentially cost your company thousands in unpaid wages and hefty legal fines. When in doubt, pay interns at least minimum wage to avoid legal problems.

Unpaid internships that do not match all six of the DOL's criteria could also lead to legal problems involving workers' compensation, employee benefits, discrimination laws, federal and state taxes, and unemployment insurance coverage.

Failing to comply with wage and hour laws can lead to serious FLSA administration errors that could cost your business thousands in fines. Tools like the FLSA Compliance Kit can help you navigate through every FLSA regulation from child labor laws to timekeeping discrepancies.

Any additional advice for companies hiring unpaid interns for the summer? Please leave a comment and share your tips.

Unpaid interns and the FLSA, what you need to know before hiring summer help

Hiring teens for summer jobs? Make sure you follow the rules

Last week, Secretary of Labor Elaine L. Chao, presented the Occupational Safety and Health Administration’s (OSHA) Teen Summer Job Safety Campaign in downtown New York City.

The job safety campaign is part of OSHA’s Young Worker Initiative to reduce work-related injuries among teen employees by teaching them proper on-the-job safety techniques. OSHA’s goal is to reach more than three million teens in hopes that lessons learned now will be carried throughout young workers' careers.

The Young Worker Initiative site is full of information and helpful resources for teens, parents, employers and educators for all to help young summer employees have a safe and rewarding work experience.

The Teen Summer Job Safety Campaign kicks off just in time as teens begin their search for summer work. Be sure you know the laws regarding child labor and safety before hiring any underage employees.

Two major areas to be concerned with are the Fair Labor Standards Act and OSHA.

OSHA. Depending on where you do business and in what industry, you must comply with certain hazard-specific job safety and health standards. OSHA is the federal department in charge of setting and enforcing safety and health standards in the workplace. All employees, including teen workers should be trained on how to stay safe while on-the-job.

Visit the OSHA Teen Workers site and your local Employment Standards Office for help with questions.


FLSA. The FLSA was set in place to protect minors’ educational opportunities and prohibit work that is harmful to their health and safety. For employees under the age of 18 there are rules regarding compensation, occupations and industries they may work in, as well as the hours they may work. Each state also has a set of child labor standards to abide by.

Visit the Department of Labor for more information on the FLSA and also be sure to check with your local state offices on specific standards in your state.


G.Neil carries an entire line of labor law compliance solutions to help you understand both the FLSA and OSHA, before hiring teens for the summer. Take a look and be sure you know the right way to hire and manage teen employees this summer and all year round.

Hiring teens for summer jobs? Make sure you follow the rules

Internships: To pay or not to pay?

As you interview and start to fill summer internship positions with energetic, young college students, think about how you plan on compensating their work.

To pay or not to pay? - The big internship question.

Many businesses pay interns well for their work, but unpaid internships do still exist across non-profit and for-profit organizations alike.

A new study by the National Association of Colleges and Employers (NACE) found that college students can make a decent hourly salary if they land the right internship. The 311 employers who participated in the survey reported offering their undergraduate interns $16.33 an hour on average and almost $25 for interns with Masters’ degrees.

Many factors can impact intern salaries, including the student’s degree level, year in school, field of study and organization’s industry and location, according to NACE.

Ann Bares at the Compensation Force blog notes that students in the NACE survey report less satisfactory experiences with unpaid internships, often citing lack of pay as a major reason for dissatisfaction.

She offers some “food for thought” while you fill internship spots for this summer:

“My guess is that, while the lack of pay may indeed be a dissatisfier, there is probably an interplay of factors at work here: organizations that are not paying their interns may be less motivated to invest in creating the support and structure necessary for a worthwhile experience - for both parties.”

Internships: To pay or not to pay?